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Sales

5 Loyalty plans structures that keep customers coming back for more

Published by Editorial team, last update May 2, 2020
A series of cartoon people moving around next to shopping, credit cards and shop reward discounts

The holy grail of brand marketing is finding a means of not only attracting customers but then holding on to them in a crowded or competitive market environment.

Loyalty programs are nothing new, with everyone from airlines to restaurants using different varieties to hook customers in the hope that their respective brands will become seared into the psyches of generations to come.

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However, in a digitised and ever-changing world, is there still a place for loyalty programs and if there is, which ones can still work wonders for entrepreneurs looking to innovate, disrupt and win industry awards?

People love collecting points

Incentivising customers with points when they make purchases is perhaps the most well known of the loyalty program structures and one that has stood the test of time.

The key to making any points system successful is making sure it’s crystal clear how many points a customer will receive when they make a purchase, as well as what they can then use their points to acquire. If either of these two processes become too complicated customers quickly flee the model, losing patience.

Some companies who’ve successfully employed such a model despite, selling very different products, include North Face who keep people coming back for their high-end clothing, PokerStars who enamor their customers with top quality games, and Tesco whose club card is now enshrined in the wallets of many a grocery shopper.

Subscribers feel special and boost cash flow

Perhaps the most groundbreaking of all current loyalty programs is the subscription model, which despite needing a lot of capital to get up and running, is a proven way of boosting cash flow while also allowing you to make solid financial projections, which investors always like to see.

Most of the examples making the biggest waves at the minute tend to be tech of fintech based, with the likes of Snyk who help developers code, Otro who give access to footballers’ private lives and Behavox which helps firms harness the power of artificial intelligence.

Another way that this model can be harnessed to maintain a loyal customer base is by offering customers discounts if they sign up to lengthier subscription plans. So, if you plan to drink top grade coffee for the rest of your life, why not sign up to a two-year subscription and grab yourself 20% or 30% off!

Customers revel when they progress

Whether you’re a sports clothing wear company encouraging people to stay fit or a language school egging people on to add another language to their bow, this is something you should be looking to develop as a standalone loyalty program or integrated into your current offering.

Something that can be helpful is to develop an app that complements the program, such as the fitness and training apps that Nike have developed, allowing their customers to track the progress their sports products allow them to realise.

Paid memberships make you feel part of the club

If you already have a thriving customer base but worry about new competitors hunting them down, a good way to lock them in is using a VIP membership system.

This can involve you lavishing your most important customers with gifts, special offers and exclusive early releases, it also allows you to build a buzz about your company as word spreads about the new incentives on offer.

Plenty of media organisations are already employing this sort of structure as well as the likes of bookshops eager to have their most ravenous bookworms kept on their hook and their hook only.

The charity program

If your brand is recognised as one that cares for the environment or wider society, then it may be the case that your customer base is more motivated by philanthropic ventures than by anything else.

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This is borne out by the likes of Body Shop, who regularly allow their customers to feel good about themselves by letting them know that their customer rewards are being diverted to charities that match the brand’s values.

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